It is every traveller's nightmare, stepping off a flight in a far-flung country and waiting by the airport conveyor belt, only for it to grind to a halt without surrendering your luggage.

The scourge of lost baggage has ruined countless numbers of otherwise idyllic holidays and, as figures yesterday show, the nightmare is now more common than ever.

A report by the UK's Air Transport Users Council (AUC), shows the world's airlines irretrievably lost more than one million bags in 2007 alone, equating to one misplaced piece of luggage for every 2,000 passengers.

In the same year, more than 42 million pieces of luggage were mishandled worldwide, a dramatic increase on the 2006 total of 34 million. In 2005, the figure was 30 million. The report warned that with air passenger numbers expected to double in the next decade, by 2019 airlines could be mishandling up to 70 million bags a year.

The council added that on "too many occasions" passengers were also not being fairly compensated for lost bags. It said it had received complaints about the Irish low-fare carrier Ryanair, which frequently gave passengers just £15 in compensation for a temporarily misplaced bag, regardless of how long they had been separated from their belongings. One Ryanair passenger found his guitar had been snapped at the neck, but was offered only £15 by the airline since the instrument was more than three years old. He produced a receipt proving that it had originally cost £1,800 and the carrier eventually increased the offer to £754 after the AUC intervened.

Another traveller on a different airline requested £1,120 for her lost bag but was only reimbursed £79.34, because she did not have any receipts to back up her claim.

The AUC chairman, Tina Tietjen, said: "If something does go wrong, airlines should be prepared to compensate passengers fairly. On too many occasions, passengers are not fairly compensated for lost luggage, because they do not have receipts for the items in their bag or because the airline is taking into account depreciation of the value of the items. And with delayed baggage, passengers are often out of pocket because airlines will not reimburse them fully for expenses they incurred buying essential items while they are without their bag." Ms Tietjen said the AUC was disappointed that the Montreal Convention, which came into force in 2004 and set out airlines' liabilities to passengers and their baggage, had not had more of an effect on payouts.

She said some airlines had "gone to great lengths to address their baggage-handling performance", but added: "Airlines are still too quick to load risk on to the passenger."